Article (May-2017)

Creating a Winning Strategy

How your organization can drive a strategic human resources advantage.

In kicking off the 2017 CEO Talent Summit, former Procter & Gamble CEO A.G. Lafley made a comment that resonated with business leaders gathered for two days of discussions on developing a strategic human resources advantage.

"When I joined P&G in the mid- '70s they selected me," he said. "When you hire today, the candidates are selecting you at least as much as you are selecting them. And then every few months, every few years, they are reselecting you."

That fundamental shift is just one of several drivers reshaping the way companies approach hiring, nurturing, developing and retaining talent. It's increasingly apparent that, in order to build and maintain an effective workforce in today's intense war for talent, companies need to understand and address these 5 themes.

1. Digital transformation is changing expectations on both sides of the talent equation- employer and employee. The same technological advancements upending business models-the Internet of Things, mobile commerce, robotics and additive manufacturing-are also reshaping the kind of workforce today's companies need in order to adapt and evolve. As John Minor, president and chief investment officer at Jobs Ohio, pointed out, "There's a big disconnect between the skill sets that workers have today and the skill sets that are needed by companies. That's an enormous challenge in the workforce today."

The demands that digitally savvy employees make on employers are, in turn, redefining the employment equation, noted Carolyn Tastad, P&G's group president, North America. "Digital transformation is changing our expectations of what we need from our employees, and it's also changing the expectations that the new talent base has of us," she said.
Workers willing to and capable of embracing digital technologies tend to demand transparency from employers (both in terms of what is expected of them and what they can expect in terms of a career path) and to place a premium on things like work-life balance and a culture of inclusion.

At the same time, retrofitting these elements into established companies with hierarchical structures is a challenge many companies are struggling to navigate. "To reach out to that talent set, you have to be completely transparent," explained Metayer. "As a very hierarchical organization, that level of transparency is not one we are used to."

2. Purpose can play a powerful role in attracting and engaging talent. Popular perception holds that younger workers place a premium on purpose when it comes to choosing employers-proactively seeking out jobs where they can feel that they're contributing something worthwhile. Business leaders, however, reported that purpose actually holds broad appeal. Employees, regardless of demographics and across all industries, are increasingly attracted to companies where they can feel that they are doing meaningful work-and tend to stay longer and perform better when that are the case.

Bruce Pfau, Ph.D., KPMG's vice chair of human resources and communications, experienced this when his company invited workers to participate in an online initiative by sharing their "higher purpose at work" stories. The response was enthusiastic, with 10,000 stories submitted in the first three weeks alone, a number that swelled to 42,000 in the months following. "We thought the responses would come from our younger workers, but when we actually looked at them we found that 50 percent were coming from people over age 35," he reported. "It turned out everyone wants to have a sense of meaning and impact from their work, not just millennia's.

3. Traditional workspaces and work methods need to be reconsidered. Beyond purpose, employees increasingly want more control of when, where and how they work-and companies offering such flexibility find it easier to hire and retain top talent. That's proved the case for Watt Global Media, where CEO Greg Watt adopted a Results Only Work Environment (ROWE) that entirely eliminated the need for any of its employees to come into the office-ever. "It's about equal parts autonomy and accountability," he explained. "It comes from the concept that work is not where you go, it's what you do."

Watt said that "treating people like adults" by performance goal-setting and providing ongoing feedback that "manages the work not the people" has led to greater productivity, as well as improvements in recruitment and retention. "Our top line has gone up every year since we implemented it, and our operating margins are the best we've ever had in the history of the company," he said.

While less dramatic, P&G has also revisited some of its approaches to nurturing talent, noted Mark Biegger, chief human resources officer at P&G, who said that the company has dialed back on its tradition of moving employees into new businesses and new locations every few years. A decade ago, it wasn't unusual for the head of a business unit to be moved over to manage a completely different business unit in a different country.

Over the past 10 years, P&G also made a big investment in building a talent-planning data infrastructure that informs career planning for all of its employees around the world. "We literally have a talent profile that brings together everything the company knows about every person in the organization," explained Biegger. "Their assignment and compensation history, what categories they've worked on, what markets they've worked in, who all their previous managers and mentors have been-it's all there. That reporting capability gives us easy access to the data we need to make decisions. You really can't do good talent planning without pretty good data."

4. Bridging the generational divide is critical for alignment. For many companies, aligning workers from multiple generations around a common purpose is proving difficult. Seasoned employees steeped in essential industry knowledge often feel threatened by younger employees eager to bring their skills to the table. Meanwhile, millennia's can feel stifled by their more experienced colleagues.

P&G uses mentoring programs to encourage collaboration among its multigenerational workforce and to help bring experienced workers up to speed on new technologies. "We do reverse mentoring, matching new people coming in with skill sets they've developed organically with those within who have a deep knowledge base," P&G's Tastad said. "Unleashing the best of both is something we try to be intentional about."

5. Cultivating “Intrepreneurial” thinking is a new imperative. Gone are the days when large, long-established companies could count on deeply ingrained processes vetted over time to carry them into the future. Yet that is exactly what most large organizations do, noted Michael Arena, chief talent officer at General Motors. "We grow up these enormous entities, we lock them in, we structure them, we build processes, rigor and procedures," he said. "And then ultimately, we cannot respond when the market dictates it."

Yet, encouraging innovation, and the risks it invariably entails, can be difficult for companies like P&G, noted CEO David Taylor, who added that freeing employees to think and act like entrepreneurs represents a huge shift for a $76 billion global company. Once a process is well-established, a company-and, by extension, its employees-loses the capacity for change, behavior Taylor likens to that of a circus elephant. "Sometimes a chained elephant will fight the chain for a while, but then, if you cut the chain, he will still stay within that circle," he explains. "If you have processes that encumber people for an extended period of time, then when you change the process they're like that elephant-nothing changes."

P&G's Innovation Initiatives
Long lauded for the deeply instilled processes that enabled it to build household-name brands, P&G has struggled to continue that winning streak over the past decade. Under CEO David Taylor, who was charged with addressing that issue when he took the helm in 2015, the company is looking to reignite the innovation engine by accessing ideas from frontline employees who engage directly with consumers of the household products it sells.

"The U.S. ad showed someone putting a couch on top of a car and taking it through the car wash," recounted Taylor. "The category went from declining 3 percent to growing almost 10 percent and we particularly prospered. That whole idea came from junior people in homes observing customers interacting with the brand. It would not have come up in our Cincinnati headquarters.